Merchant Account FAQs Are The Facts

High Risk Merchant Accounts 101 (FAQs)

The Basics or High Risk Merchant Account FAQs aren’t difficult. However, most people fail to understand one concept. A merchant account (High risk or not) is most often an unsecured line of credit to the merchant.

Therefore, when there is a higher risk involved, the merchant should expect that the risk taker (third party processor in most cases) will want to soften the risk by charging higher rates, accumulating reserves by taking a piece of the processing and holding it, or funding the transactions later then normal.

Here are a few Merchant Account FAQs and answers you should read and understand.

1. What Is A High Risk Merchant Account?

A High Risk Merchant Account allows the “alternative merchant” to accept credit cards for their goods or services. “Alternative merchants” include any merchant, which the banks judge or perceive as high risk.

2. How Do I Apply For A High Risk Merchant Account?

Click here and fill out and submit the Quick Application Form.

3. What Will I Need To Be Approved?

Most merchants need a clear copy of an ID, Voided check, web site or marketing materials. Some merchants (not all) may need to show articles of incorporation and checkbook statements. Existing merchants will need to show copies of their current processing statements and depending upon the volume will need to have financials or tax returns.

4. What Are The Rates?

Rates can vary widely. While some merchants might receive competitive bids of 2.18% plus 28 cents, others will pay 4.99% plus 30 cents. Some merchants will process off shore and may pay as high as 9%.

5. What Is A Rolling Reserve And Will I Be Asked For One?

A Rolling Reserve usually “rolls” for 6 months and is given to the highest risk merchants. Basically, a percentage (ranges from 5% to 20% usually) is taken off the top of each transaction and is placed in a non-interest bearing checking account for 6 months. On the 7th month, the merchant receives the 1st month back. On the 8th month, the merchant receives the 2nd month back and so forth rolling forward.

This is actually an awesome way to build predictable reserves against charge backs and establish higher and higher volumes without your business being capped.

6. Can I Process In Canada?

First, if you are a Canadian business owner, we can set you up for a swipe account right in your business. Separately, if you are from the USA we can establish a merchant account for you so that you can accept Canadian credit cards.

7. Can I Process All Over The World?

Yes, but first we must help you get incorporated in the EU.

Here’s the link. Incorporating in the EU is easy and costs approximately $500. It takes about 3 days. Once Incorporated, you will fill out a pre-application. The response from our German bank will include the rates, fees and any upfront costs. It will also include any reserves if needed. They will also send you the final application. It’s important to note that getting incorporated does not guaranty approval for a merchant account. However, you won’t get a merchant account without it. Many people do get approved for a global merchant account.

8. Can I Still Use My Bank Even If I’m Processing In South America Or Australia?

Yes, the bank of deposit does not need to be changed. You may also choose several forms of currencies for remittance. You may choose US Dollars, Euros, and GBPs.

9. How Do I Protect My Business Against Fraud?

Our gateways all use Fraud scrubbing technology. However, you may be asked to use Verified By VISA which protects you and the cardholder against fraud. The system allows the cardholder to enter a secret code. This is checked and authorized by several databases. This is the only time when an Internet transaction cannot be charged back by the cardholder. The cardholder can try, but if “Verified By VISA” authorized the transaction, the merchant wins before the first step of a charge back ever takes place.

The above Merchant Account FAQs may not answer all your questions. Please feel free to click on Contact and let me know any other questions you have.

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